Chapter 1
Findings of the Property Value Study and Summary
Overview of Property Value Study
The annual PVS estimates the total taxable property value in each school district in San Patricio CAD. With a few notable exceptions, the law requires all CADs and PTD to appraise property at market value. Market value, in essence, is the price a willing buyer would pay a willing seller for the property under normal conditions. State law requires CADs to appraise agricultural land and timberland according to the productivity value of the land's category.
The CAD determines the local appraisal roll value and certifies it to each school district; these values become the districts' tax roll values. Each school district must submit an annual self-report of its property values to PTD, which audits the reports for accuracy.
PTD's estimates total taxable value in a school district, called the state value, i by estimating market value or by accepting the local appraised value in each property category and then adding these category values for an overall school district value. PTD then deducts the school district's self-reported, state-mandated homestead exemptions, disabled veterans exemptions, value limitations, reinvestment zones, freeport exemptions, the loss between market value and productivity value of qualified agricultural lands, the school tax ceiling for homeowners over age 65 or with a disability and other state-mandated exemptions.
PTD issues a preliminary and a final PVS each year. School districts and CADs may protest the findings of the preliminary PVS through an administrative hearings process. This process requires the protester to file a written protest with supporting documentation within 40 days of the issuance of the preliminary PVS. PTD may amend the findings of the preliminary PVS based on the submission of a written protest, a conference between PTD and CAD representatives or a formal hearing. A hearings examiner appointed by the Comptroller's general counsel holds the formal hearing; this person is not a PTD employee. A school district that disagrees with the hearing examiner's final decision may appeal it to Travis County district court.
When conducting the property value study, PTD assigns property to various categories, such as residential, commercial and rural property, so it can study like property together.
In general, a ratio indicates the percentage of market value, as determined by PTD, at which a CAD appraises a property or group of property. A ratio of 1.0 indicates appraisal at market value–the legal standard. Generally, when appraisals with ratios are close to the standard, for instance between 0.95 and 1.05, they are considered reasonably accurate for a property group.
Eligible School Districts
PTD identified Mathis and Sinton ISDs as eligible school districts when their local value fell outside of the confidence interval limit determined by the 2006 PVS. Four property categories were tested in Mathis ISD: Category A: Real Property: Single-Family Residential, Category D: Rural Real, Category F1: Real Property: Commercial, and Category J: Real and Personal Property: Utilities.
Category A: Real Property: Single-Family Residential made up 64 percent of the total test value and 55 percent of the school district's value. A review of the Category A: Real Property: Single-Family Residential sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 63 percent to a high of 194 percent of market value, with a weighted mean ratio of 0.9529.
Category D: Rural Real made up 21 percent of the total test value and 17 percent of the school district's value. Category D: Rural Real includes two subcategories. Productivity value of D1: Real Property: Qualified Agricultural Land includes primarily farm and ranch land that qualifies for the special productivity appraisal. D2: Real Property: Non-Qualified Land is primarily rural homes and land that do not qualify as farm, ranch or timberlands. The differences in value between D1 and D2 are wide since D1 land is appraised using a special statutory method to determine the land's productivity value, and D2 value is based on what the land would sell for in an open-market transaction. D1 land made up 2 percent of the total test value and 2 percent of the school district's value. The weighted mean ratio of D1 values tested was 0.8608. D2 property made up 10 percent of school district's value and 8 percent of the school district's test value. The CAD appraised D2 property from as low as 29 percent to a high of 246 percent of market value, with a weighted mean ratio of 0.9857.
Category F1: Real Property: Commercial made up 8 percent of the total test value and 6 percent of the school district's value. A review of the Category F1 sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 66 percent to a high of 126 percent of market value, with a weighted mean ratio of 0.9399.
Category J: Real and Personal Property: Utilities made up 7 percent of the total test value and 9 percent of the school district's value. A review of the Category J sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 88 percent to a high of 111 percent of market value, with a weighted mean ratio of 1.0036.
The PVS tested the same four property categories in Sinton ISD.
Category A: Real Property: Single-Family Residential made up 54 percent of the total test value and 42 percent of the school district's value. A review of the Category A sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 60 percent to a high of 189 percent of market value, with a weighted mean ratio of 0.9537.
Category D: Rural Real made up 27 percent of the total test value and 20 percent of the school district's value. D1: Real Property: Qualified Agricultural Land made up 13 percent of the total test value and 10 percent of the school district's value. The weighted mean ratio of D1 values tested was 0.8565. D2 land made up 10 percent of school district's test value and 10 percent of the school district's value. The CAD appraised D2 property from as low as 53 percent to a high of 118 percent of market value, with a weighted mean ratio of 0.8475.
Category F1: Real Property: Commercial made up 8 percent of the total test value and 6 percent of the school district's value. A review of the Category F1 sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 82 percent to a high of 115 percent of market value, with a weighted mean ratio of 0.9614.
Category J: Real and Personal Property: Utilities made up 11 percent of the total test value and 13 percent of the school district's value. A review of the Category J sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 89 percent to a high of 111 percent of market value, with a weighted mean ratio of 1.0013.
While these figures show the range of property ratios in San Patricio CAD, a clearer measure of appraisal performance includes how many of these ratios were within 10 and 25 percent of the median ratio. The median ratio is the ratio in the middle of all the other ratios when sorted by size.
These figures, in conjunction with the coefficients of dispersion (CODs) outlined below, measure the consistency of an appraisal district's property appraisals at the same percentage of market value, without regard to value. A low COD combined with high percentages indicates equitable appraisals; while a high COD paired with low percentages indicates inequitable appraisals.
The median ratio for Category A: Real Property: Single-Family Residential in Mathis ISD was 97 percent, with 35 percent of the ratios within 10 percent of the median and 72 percent within 25 percent of the median.
The median ratio for D2: Real Property: Non-Qualified Land in Mathis ISD was 96 percent, with 40 percent of the ratios within 10 percent of the median and 70 percent within 25 percent of the median.
The median ratio for Category F1: Real Property: Commercial in Mathis ISD was 95 percent, with 73 percent of the ratios within 10 percent of the median and 91 percent within 25 percent of the median.
The median ratio for Category J: Real and Personal Property: Utilities in Mathis ISD was 102 percent, with 88 percent of the ratios within 10 percent of the median and 100 percent within 25 percent of the median.
The median ratio for Category A: Real Property: Single-Family Residential in Sinton ISD was 99 percent, with 37 percent of the ratios within 10 percent of the median and 79 percent within 25 percent of the median.
The median ratio for D2: Real Property: Non-Qualified Land in Sinton ISD was 85 percent, with 20 percent of the ratios within 10 percent of the median and 60 percent within 25 percent of the median.
The median ratio for Category F1: Real Property: Commercial in Sinton ISD was 96 percent, with 68 percent of the ratios within 10 percent of the median and 100 percent within 25 percent of the median.
The median ratio for Category J: Real and Personal Property: Utilities in Sinton ISD was 102 percent, with 33 percent of the ratios within 10 percent of the median and 33 percent within 25 percent of the median.
San Patricio CAD Summary
San Patricio CAD's overall median ratio was 0.98. Category ratios included the following:
- Category A: Real Property: Single-Family Residential sample ratios ranged from 0.58 to 1.94, with a median ratio of 0.98;
- Category B: Real Property: Multifamily Residential sample ratios ranged from 0.83 to 1.10 and had a median ratio of 0.97;
- Category C: Real Property: Vacant Lots and Tracts sample ratios ranged from 0.53 to 1.91, with a median ratio of 0.93;
- D2: Real Property: Non-Qualified Land sample ratios ranged from 0.29 to 2.46, with a median ratio of 0.96;
- Category F1: Real Property: Commercial sample ratios ranged from 0.66 to 2.27 and had a median ratio of 0.95;
- Category G: Oil, Gas and Other Minerals sample ratios ranged from 0.62 to 1.21, with a median ratio of 1.03;
- Category J: Real and Personal Property: Utilities sample ratios ranged from 0.14 to 8.52 and had a median ratio of 1.02; and
- Category L1: Personal Property: Commercial sample ratios ranged from 0.82 to 1.05 and had a median ratio of 0.98.
Coefficient of Dispersion
The COD, the primary measure of appraisal uniformity, measures the average percentage by which individual ratios vary from the median ratio. According to IAAO's Property Appraisal and Assessment Administration, a low COD indicates that appraisals within a category of property are uniform, while a high COD indicates the CAD is appraising property at inconsistent percentages of market value. A COD that is very low, however, may suggest the CAD is "sales chasing," a form of unequal appraisal.
According to IAAO's Standard on Ratio Studies, CODs for single-family residences should generally be 15 or less, and 10 or less for new and homogeneous areas. For vacant lots, and for income-producing property, the COD should be 20 or less. For other real property and personal property, CODs should reflect the nature of the property, market conditions and the availability of reliable market indicators.
The CODs for San Patricio CAD categories in the 2006 PVS were:
- Category A: Real Property: Single-Family Residential property, 14.56;
- Category B: Real Property: Multifamily Residential, 8.64;
- Category C: Real Property: Vacant Lots and Tracts, 26.69;
- Category D. Rural Real, 17.13;
- Category F1: Real Property: Commercial, 9.41;
- Category J: Real and Personal Property: Utilities, 3.10;
- Category G: Oil, Gas and Other Minerals, 8.84; and
- Category L1: Personal Property: Commercial, 3.94.
The COD for Mathis ISD categories were:
- Category A: Real Property: Single-Family Residential, 19.44;
- Category D. Rural Real, 30;
- Category F1: Real Property: Commercial, 9.64; and
- Category J: Real and Personal Property: Utilities, 2.97.
The COD for Sinton ISD categories were:
- Category A: Real Property: Single-Family Residential, 17.11;
- Category D. Rural Real, 20.68;
- Category F1: Real Property: Commercial, 8.93; and
- Category J: Real and Personal Property: Utilities, 3.01.
These numbers indicate areas of inconsistency in appraisal in vacant land in the CAD, single-family residences in Mathis ISD and rural property in both Mathis and Sinton ISDs.